Funny thing is I programmed the same chip about 10 times or so in the past without any issues, and after couple months of not touching the setup I just wanted to reprogram another hex file, but the chip never receives the new firmware.

Take a look at the avdude output, as you'll realize the write operation never happens. This, ultimately, is my question. What do you think might cause the write to never get invoked?

I'd like to develop under windows using Atmel studio, so in order to keep that spirit alive, I have ordered an atmel ice debugger-programmer, so I will try to program the chip with it once it arrives, but in the meantime I will give it a go using the raspberry pi and its' GPIOs to get my code into the chip and eliminate the possibility of working with a bricked chip...

t85 is the same as attiny85 or ATtiny85 (which is my preference)
Yes, all the switches are case sensitive e.g -u is different to -U
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Yes, the verbose output is horrible. But it is useful when something goes wrong.
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David.